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California Sues AbbVie Over Alleged Arthritis Drug Kickbacks

(Bloomberg) -- California’s insurance regulator is suing AbbVie Inc., alleging that the pharmaceutical giant gave illegal kickbacks to health-care providers in order to keep patients on its blockbuster rheumatoid arthritis drug Humira.

The company “engaged in a far-reaching scheme including both classic kickbacks -- cash, meals, drinks, gifts, trips, and patient referrals -- and more sophisticated ones -- free and valuable professional goods and services to physicians to induce and reward Humira prescriptions,” the California Department of Insurance said in a statement.

According to the state, AbbVie paid for registered nurses that it called ambassadors to help doctors with patients who were taking Humira. While the nurses were represented to patients as an extension of the doctor’s office, they were trained to tout the drug while downplaying its risks, the state said.

“AbbVie spent millions convincing patients and health care professionals that AbbVie Ambassadors were patient advocates -- in fact, the Ambassadors were Humira advocates hired to do one thing, keep patients on a dangerous drug at any cost,” Insurance Commissioner Dave Jones said in the statement.

The alleged misconduct “is particularly egregious because it’s well known the drug has very adverse side effects,” said Jones in a press conference. Under the ambassador system, complaints or concerns about serious infections, blood problems, or even heart failure -- all known side effects of Humira -- could go unreported to patients’ physicians, he said.

The allegations “are without merit,” AbbVie spokeswoman Adelle Infante said in a email. The company complies with state and federal laws governing interactions between health-care providers and patients, she said. Its services help patients and “in no way replace or interfere with interactions between patients and their health-care providers,” she said.

Humira is one of the world’s biggest-selling medications. The drug brought in $18.4 billion in 2017, accounting for roughly two-thirds of North Chicago, Illinois-based AbbVie’s revenue. Private insurers have paid out $1.2 billion in Humira-related claims, according to Jones.

AbbVie’s shares dropped after the news of the lawsuit, falling 2.9 percent to close at $92.61 in New York.Jones is intervening in a whistleblower complaint filed in California by a nurse who was employed as an AbbVie ambassador in Florida several years ago. The suit, filed in Alameda County Superior Court, seeks three times the amount of each claim made for Humira as a result of the alleged kickbacks. The lawsuit involves private insurance claims, said Nancy Kincaid, a spokeswoman for the California Department of Insurance.

“We conducted an investigation. We believe there is strong evidence that fraud was committed against private insurance companies,” said Kincaid.

The same whistleblower has filed a separate false claims lawsuit in federal district court in Illinois. Earlier this year, the U.S. declined to intervene in that lawsuit.

Critics have accused AbbVie of seeking an excessive number of patents on trivial improvements to keep competition for Humira off the market, a technique known as “evergreening.”

AbbVie has sought some 247 U.S. patent applications on the drug, with 89 percent of those filed after the drug was approved by U.S. regulators in 2002, according to a study by the Initiative for Medicine, Access and Knowledge, a consumer group that’s blasted drugmakers over high drug prices.

A low-cost copy of the medicine will be available in Europe in October, while the U.S. version won’t be allowed until 2023, under the terms of a settlement AbbVie reached last year with Amgen Inc. The patent on the active ingredient for Humira expired in 2016.